FAQ: business lending & business loans for business owners
Business Loans Frequently Ask Questions
About The Somerville Small Business Loans
Let me know more about Somerville Small Business Loans
Somerville unsecured loans offers amounts between $5,000 and $100,000. Terms range from 3 and 24 months and cash flow friendly repayments, which are either daily or weekly.
What makes the Unsecured Loan different from an traditional business loan?
You can apply to this Small Business Loan in under 10 minutes online or over the phone, receive a same day response and the funds could be available in just 24 hours. Traditional business loans are based on an annual rate of interest along with other charges and fees. Our business loan is a pre-paid loan therefore you’ll be aware of the amount you will have to pay, including any fees, interest or charges. This is then broken down into either a daily or weekly repayment figure.
What can the Small Business Loan be used for?
A Small Business Loan can be used to fulfill almost every business need, such as cash flow management, business renovations, marketing to purchase inventory, new equipment, to fund general working capital, and much more. The loan is not available for personal reasons.
About the Larger Somerville Business Loans
What is the Larger Somerville Business Loan?
The Larger Business Loan is a larger size of loan that can be used to fund company growth opportunities. Loans range from $100,000 to $500,000 with a fixed-term up to 36 months. The repayments are made weekly or fortnightly depending on your cash flow.
How is the Origination Fee determined?
This Larger Business Loan has an Origination Fee, calculated at 2.5 percentage of the amount of the loan.
Can I get the Larger Business Loan?
To be eligible for a credit in this amount the company needs to be operating for at least three years, and have an annual income of at least $700,000. The applicant must also be a New Zealand Citizen (or Permanent Resident) with a minimum age of 18 years old, own a New Zealand business (with a valid NZBN/IRD) and be able demonstrate at minimum 12 months of business.
What can I use the funds for?
A large business loan can be used for nearly every business reason, such as business remodeling, buying equipment or inventory or as general working capital, and much more. The loan is not available to fund personal expenses.
Is the Larger Business Loan one that requires security?
Asset security is required for accessing funds over $150,000. It’s by taking a charge over assets, and could be registered on the PPSR or making a caveat.
A personal or director’s ensure is a commitment to repay credit that is generally in nature rather than stipulating security over an asset. The person who is signing the ensure is personally liable if the business borrower is unable to make the repayment.
The Personal Property Securities Register (PPSR) is an online central register operated by the New Zealand Government. It reflects security interests granted to individuals who own personal property (including the assets or goods). The PPSR permits the priority of personal property granted in accordance with the date on which a security interest was registered.
Caveats are legal document lodged to provide notice of a legal claim against a property.
What is a pre-approval minus Credit Check?
If you’re requesting an enterprise loan of $250,000 or more we can offer a preliminary pre-approval to help simplify the process. It is possible to get this done without credit checks and within six hours of your initial application. The pre-approval is based upon an initial assessment, which involves you answering a few financial health questions. This is not an offer or guarantee of funds. Unconditional approval is subject to an extensive credit evaluation and any offer you may receive may be subject to different terms.
The application process
Are I eligible for funding?
You may be eligible for a business loan if you
- are a New Zealand Citizen (or Permanent Resident)
- are at least 18 years old, own a New Zealand company (with a valid NZBN/IRD)
- can demonstrate at least 6 months of business (for the unsecured loan $5K – $100K) or 3 years of trading (for the Larger Business Loan $100K - $500K)
How do I apply?
The application process is fast and easy. Complete the online form in few minutes and an experienced company expert in lending will contact you to assist you.
To apply for up $100,000 you’ll require proof of identity (valid Driver’s Licence) along with a valid NZBN/IRD and at least six months of bank statements.
In addition, for larger loan sizes, you’ll need:
$100K-$250K: Information about the application including credit consent, 6 – 12 months of bank statements, IRD statement (if the loan is greater than $150K).
$250K – $500K: Details of the application, including credit consent twelve months of bank statements, IRD statements Last 2 years’ finalised financial statements, in addition to interim financial statements for the current year such as age-related payables and aged Receivables summaries.
How fast will I get an answer?
For an unsecured loan ($5K to $100K) we typically provide an answer within one hour, provided you apply at quality business time and permit us to make use of the advanced bank verification system to instantly verify your bank details online. If you opt to upload copies of your banking statements , we are able to provide an answer in as little as the span of one company day.
For the Larger Business Loan ($100K to $500K) we could be able to provide you with a conditional pre-approval within 6 hours. Once you’ve signed the pre-approval form, it will take around 2-3 days for final approval, however this could be shorter based on the particular circumstances of each application. Some transactions have received approval within the space of 24 hours.
The quickest way to apply is to ensure you apply during standard company hours, and allow us to use our advanced bank verification system link to confirm your bank details online. If you decide to upload duplicates of your banking statement, it can take a bit longer.
How quickly will I receive the money?
For the Small Business Loan ($5K to $100K) we usually offer an answer within an hour if you make your application in normal business timings and allow us to make use of the advanced bank verification system link to instantly verify your bank information online. If you opt to upload copies of your bank statement, we’ll provide an answer in as little as an business day.
For the Larger Business Loans ($100K and up) we might be able to offer you with pre-approval conditional to your application in around 6 hours. Once you have signed the pre-approval, turnaround times are around 2-3 days for final approval, however this can be faster depending on the circumstances of each application. Some transactions have received approval in the space of 24 hours.
The fastest way would be to ensure you apply during standard business hours. Also, allow us to use our advanced bank verification system link to confirm your bank details online. If you choose to upload the copies of bank statements, it can take a bit longer.
How much can I borrow?
We offer the loan amount between $5,000 and $500,000. If you apply for a specific amount we take into consideration a range of aspects for determining how much we can lend you well-being of your business as well as the amount of repayments your company can support. The total amount of your loan will be contingent on the particular circumstances that are unique to your business.
When you apply for a specific amount we look at a range of aspects to assess the well-being of the business as well as the amount of the repayments your business will be able to support. The total amount of your loan will be determined by the particular circumstances of your company.
Fees & repayments
How much do you charge for an company loan?
When you apply for business loans with us company loans, we’ll assess the risk profile the business and provide you with a customised offer including the loan amount, the terms and interest rates. A business loan is an upfront cost loan so you will know the exact amount payable including any costs, fees, or interest rates.
What determines the rate that I pay?
Business loan interest rates depend on several factors like the amount of money borrowed, the business assets the funds will be used for, the industry the business is in, how long the business has been running and how long the business has enough cash flow to support the loan, as well as the overall well-being or financial standing of the company.
What are the cost?
There are no hidden fees for our company loans, and you’ll know precisely what it is that you be required to pay and when, starting from the day you sign up. There’s no compounding interest, and the loan comes with no additional fees (as as you make your payments in time).
We do not charge an Application Fee. You are able to get a cash loan with with no upfront cost or obligation to proceed.
The Origination Fee includes the expenses associated with establishing and managing the loan. The only way to pay this fee if you decide to take the loan. The Origination Fee for us is 2.5% of the loan amount.
Can I pay off the loan early?
You can repay the total amount of your advance loan at any time.
If you decide to take this route, please talk to one of our helpful business lending specialists. They will offer you with repayment details and an early payment figure. This will be calculated as the sum of the principal remaining and accrued interest to the date of early payout, plus 1.5 percent of the principal balance as well as any outstanding fees.
What are the repayment methods?
To help you avoid missing due dates and also to be in line with your cash flow cycle we provide payments that are either daily or weekly. They will be automatically deducted from your business account.
Security & privacy
Will my information be protected?
Making sure that your information is secure, and being transparent about the ways we gather the information we collect, use, share and protect your information, is of huge importance and is a crucial element of our relationship with you.
Is it safe to link my bank account to the platform?
Yes. We make use of industry-standard encryption protocols to safeguard your personal, sensitive financial information and our funders are ISO 27001 qualified for our commitment to customer security and security. We employ an exceptionally sophisticated banking verification system to instantly verify your bank account information online. This allows us to offer an immediate response.
About business loans
What’s an asset-based borrow (a secured loan)?
Asset-based borrowing occurs when an company owner makes use of an asset that they own to make the funds for a loan. The asset could be an asset belonging to the personal, like the family home, or a business asset like a truck or piece of equipment.
The vast majority of the lenders even the major banks, prefer to guarantee loans against assets. If you are having difficulty paying back the loan, then the asset could be offered for sale by the lender. In essence it is an opportunity to secure additional financing using the worth of the asset you already own.
What do I need security to get a company loan?
For loans that exceed $150K, it is not necessary to secure assets before you are able to access the money but we require a personal guarantee. require an individual guarantee. In the event that you fulfill the terms of your loan (as stipulated in the loan contract) and you are able to meet your obligations, asset security is not needed. For loans of over $150K generally, there is personal ensure and security in the form of an asset charge.